1942 (12) TMI 8

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..... ) and Reginald P. Hills For the Respondent : Cyril King , K. C. and John Charlesworth JUDGMENT Viscount Simon, L.C. My Lords, in this case the Crown contends that a payment of £ 7,000 to the respondent by the private company named William Mathwin & Son (Newcastle), Ltd., under a written agreement between them, dated October 4, 1937, was a "profit from the office" of director a .....

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..... al and by Mr. Hills, I am of the opinion that the decision appealed against is right and that the present appeal must be dismissed. The written agreement of October 4, 1937, recites that Robson has for some years served the Company as a director and manager at a fixed salary with bonuses, and that his service is terminable by short notice on either side, but that his services and connection are i .....

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..... the agreement deal with a different matter. Clause 8 binds Robson if his service in the Company is terminated before April 1, 1942, not be concerned or interested in the business of coal exporter, coal merchant, or ship broker within 50 miles of Newcastle-upon-Tyne until April 1, 1942, is reached. Clause 7 provides that in consideration of this restrictive covenant the Company shall on the executi .....

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..... venant is to be given not during the period of his employment, but after its termination. He is giving to the company for a sum of £ 7,000 the benefit of a covenant which will only come into effect when the service is concluded. I agree with the Court of Appeal in the view that to treat this £ 7,000 as a profit arising from the respondent's office is to ignore the real nature of th .....

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..... hat, and to decide the present case purely upon the terms of the agreement of October 4, 1937. That agreement is admitted to be a bona fide contract and, so regarded, £ 7,000 cannot properly be treated as a profit arising from the respondent's office or employment. I move that the appeal be dismissed with costs to the respondent as between solicitor and client. LORD ATKIN.--My Lords, I .....

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